The California Department of Motor Vehicles will suspend Tesla sales in the state if the electric vehicle company continues to mislead consumers about its driver-assist features, the DMV said Tuesday.
Elon Musk's Tesla has 90 days to comply before facing a 30-day suspension of its manufacturing and distributor license. Using the terms “Autopilot” and “full self-driving capability” to describe Tesla's advanced driver assistance (ADAS) features is false advertising and violates state law, an administrative law judge ruled last month.
According to Tesla's marketing materials for Autopilot and Full Self-Drive mode, “the system is designed to be able to perform short and long-distance trips without requiring any action from the person in the driver's seat.”
However, Tesla vehicles cannot operate autonomously and are only safe when used with an alert human driver, the DMV said. Tesla did not respond to a request for comment.
“Today's DMV decision confirms that the department will hold all vehicle manufacturers to the highest safety standards to keep California drivers, passengers and pedestrians protected,” DMV Director Steve Gordon said in a statement.
Earlier this year, a Miami jury ruled that Tesla was partly responsible for a fatal crash involving its Autopilot system and must pay victims $240 million.
Although Tesla has faced similar lawsuits before, this was the first to reach a jury verdict and not settle out of court.
“Tesla can take simple steps to pause this decision and permanently resolve this issue – steps that autonomous vehicle companies and other automakers have been able to achieve in California's leading and supportive innovation marketplace,” Gordon said.
The administrative law judge issued a proposed decision after a five-day hearing in July to suspend Tesla sales for a month. The DMV decided to give Tesla three months to correct its misleading advertising before facing consequences.
The scrutiny over Tesla's Autopilot and full self-driving features comes as Musk tries to prove that his self-driving robotaxis are safe and effective.
Robotaxis were deployed in Austin, Texas, over the summer, where witnesses said the vehicles malfunctioned and made dangerous driving decisions.
A shareholder lawsuit filed in August accused Musk of inflating the company's stock by overstating the readiness of its robotaxi program.
As demand for electric vehicles declines under the Trump administration, Tesla is increasingly betting its future on self-driving technology and other artificial intelligence ventures like the company's humanoid Optimus robot.
Musk is competing against autonomous transportation company Waymo, which operates driverless services in several cities, including San Francisco and Los Angeles. Waymo, owned by Alphabet, Google's parent company, also faced criticism recently after one of its vehicles hit and killed a beloved neighborhood cat in the Bay Area.
Amazon's self-driving effort known as Zoox has also begun testing and serving the public in San Francisco and Las Vegas.
